Novatek Microelectronics Corp (聯詠) yesterday reported that net profit last quarter reached another record high, benefiting from strong demand for display drivers used in laptops, tablets and gaming monitors as people under COVID-19 lockdowns learn and work from home.
Second-quarter net profit grew 20 percent annually and 15.63 percent quarterly to NT$2.56 billion (US$86.77 million) from NT$2.13 billion last year and NT$2.21 billion in the first quarter.
Earnings per share jumped to NT$4.2 from NT$3.5 last year and NT$3.63 in the first quarter.
The Hsinchu-based chip supplier expects work-from-home and remote learning to continue trending as COVID-19 lockdowns resume around the world.
The trend should help boost Novatek’s revenue this quarter by more than 10 percent on a quarterly basis to between NT$20 billion and NT$20.6 billion, from a high of NT$18.61 billion for last quarter, Novatek president and vice chairman Steven Wang (王守仁) told investors during a teleconference.
Novatek expects gross margin this quarter to fall to between 31.5 and 33.5 percent from 33.48 percent in the second quarter.
“Due to continuing lockdowns, people still need to work from home and students have to study online, so the momentum behind the sale of driver ICs for large displays should extend from the second quarter into the third,” Wang said.
Demand for system-on-a-chip solutions for TVs is also picking up as the industry enters its peak season this quarter, Wang added.
With demand for smartphones rebounding, shipments for Novatek’s advanced touch controllers with display driver integration (TDDI) for handset displays should increase significantly during this quarter, Wang said.
“We are seeing mobile phone demand bounce back for the end of July,” Wang said.
To reduce manufacturing costs, more mobile phone makers this year have adopted LCD panels — instead of high-definition, but pricey OLED panels — for new 5G phones, which has helped propel demand for Novatek’s TDDI, he said.
Novatek said that it has made progress on under-display fingerprint chips for OLED panels used in mobile phones, with the first batch shipping by the end of the year.
Separately yesterday, Novatek reported that revenue last month increased 25 percent year-on-year and 15.21 percent quarter-on-quarter to NT$6.74 billion from NT$5.41 billion and NT$5.85 billion respectively — setting an all-time high for the company.
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